Systemic financial risks will not appear in China as the country's economy has remained fundamentally sound and the financial sector is stable, Premier Li Keqiang said yesterday.

China is capable of preventing systemic financial risks, Mr Li said at a press conference after the conclusion of the annual legislative session.

China's economic aggregate has so far reached more than CNY80 trillion (US$12.6 trillion) and the assets of banks have reached about CNY250 trillion, reported Global Times citing Mr Li said.

The capital adequacy ratio and provision coverage ratio of Chinese commercial banks are much higher than international standards, Mr Li said, adding that the banks' required reserve ratio is around 15%, which means that “we have a reserve of CNY20 trillion to respond to risks".

Yet, he added that it is impossible to eliminate all risks because of the gigantic scale of the Chinese market. 

In a bid to face international uncertainties in the financial sector and some possible emerging risks in the domestic market, the central government will lower the budget deficit this year, he said.

Mr Li also said that while there are some illegal or irregular practices in the domestic financial market, the relevant authorities have adopted appropriate measures to stop them growing into a common phenomenon. "And we will pay attention to protecting the legal rights of consumers in this process."

As part of the government restructuring programme, the merger of the CIRC and the China Banking Regulatory Commission, approved by lawmakers, aims to avoid supervision loopholes, he said.